If you’re in the market for a new smartphone or even just looking around at what’s out there out of curiosity, the Samsung Galaxy S7 and Galaxy S7 Edge are likely on your radar in some form, even if you’ve discounted them due to their lack of an unlockable bootloader or somewhat high price. The twin flagships have hit and exceeded sales expectations in almost every market in a record-shattering way that no Galaxy before them has. After all, many fans see the S7 as a return to form; while the S6 lineup ditched the MicroSD card slot that had kept Samsung’s line different from competitors and the water resistance that many fans had praised in the S5, the S7 brought those features right back, along with the premium design of the S6 line. Between the S7 family and the popularity of some of Samsung’s new silicon in the mass market, analysts see them having an extremely good second quarter for this year.
On the chip side, demand for Samsung’s top-of-the-line DRAM chips has declined slightly, but newfound love in the market for their flash memory chips, going into tons of popular phones, tablets and even small PCs, has more than made up for it. According to recent reports, yields of flash memory have been increasing as the process to make them gets more efficient and less costly, leading to higher production, higher sales capacity and higher margins. Meanwhile, Samsung’s smartphones have been seeing higher overall margins, with the S7 family producing great profits and lower-end phones like the Galaxy A lineup getting in on the fun with higher than ever margins for Samsung’s low end.
A huge number of firms, including the likes of Shinhan, Korea Investment, Mirae Asset-Daewoo, LIG Investment, E-Best Investment and Eugene Investment, expect Samsung to post more than 7 trillion won, or roughly $5.88 billion, in operating profits for the quarter, making it their best quarterly net profit figure since the third quarter of 2015. Earlier estimates around the 5 trillion won area were blown out of the water by unexpectedly strong sales of the S7 family, according to analysts. DRAM demand is expected to continue falling, which may give Samsung a hard time in their total profit as Galaxy S7 sales begin to plateau and demand for their flash memory begins to either fade or shift to their other products as substitutes in higher and lower end devices. For the time being, however, Samsung is riding high, about 2 trillion won higher than expected, and should post a pretty amazing earnings call for the second quarter of the year.